The recent encouraging Covid-19 vaccine developments bode well for a significant easing of restrictions on activity in 2021, while diminishing downside risks relating to delayed medical advances to control Covid-19.
Some countries may be able to implement fairly speedy vaccination programs for the most vulnerable, paving the way for much less stringent curbs on social activities slightly ahead of the mid-2021 timing we had assumed in our existing forecasts. But progress globally still looks set to be slower.
In the meantime, Covid-19 cases and hospitalisations are rising sharply and are likely to damage the recovery in Q4 and Q1 next year.
Accordingly, we do not yet see enough evidence to justify significant upgrades to our baseline global GDP forecast for next year. But while we consider the most likely path for GDP to be little changed, the balance of risks around this modal forecast is certainly more favourable.